Zaborowski v. MHN Government Services, Inc.

concurring in part, and dissenting in part:

I concur in paragraphs 1 and 2 of the memorandum disposition but dissent from the majority’s conclusion in paragraphs 3 and 4 of the memorandum disposition that the district court did not abuse its discretion in not severing the unconscionable provisions of the arbitration agreement. I would reverse the district court on this issue, requiring severance and leaving the arbitration agreement in place.

A district court abuses its discretion when it erroneously interprets a law, United States v. Beltran-Gutierrez, 19 F.3d 1287, 1289 (9th Cir.1994), or when it rests its decision on an inaccurate view of the law, Richard S. v. Dep’t of Dev. Servs., 317 F.3d 1080, 1085-86 (9th Cir.2003). In determining whether to sever the unconscionable provisions of the arbitration agreement, the district court relied on a California state court decision holding that “multiple unlawful provisions” allow a trial court to conclude that “the arbitration agreement is permeated by an unlawful purpose.” Armendariz v. Found. Health Psychcare Servs., Inc., 24 Cal.4th 83 , 99 Cal.Rptr.2d 745 , 6 P.3d 669, 697 (2000).

But Armendariz was decided more than a decade…

MEMORANDUM **

MHN Government Services, Inc. (MHN) appeals from the district court’s order denying its motion to compel arbitration. We affirm.

1. The district court . correctly held that the arbitration provision is procedurally unconscionable. See Chavarria v. Ralphs Grocery Co., 733 F.3d 916, 922-23 (9th Cir.2013). The district court found that MHN was in a superior bargaining position, the arbitration provision was a condition of employment, and plaintiffs were not given a meaningful opportunity to negotiate. These findings are not clear *463 ly erroneous, and they support the conclusion that the contract is oppressive. See Ellis v. McKinnon Broad. Co., 18 Cal.App.4th 1796 , 23 Cal.Rptr.2d 80, 83 (1993) (defining oppression as the absence of real negotiation and meaningful choice resulting from inequality of bargaining power). Contrary to MHN’s contention, the contract’s modification provision did not invite negotiation, and California law does not require plaintiffs to have attempted to negotiate in order to show oppression. See, e.g., Circuit City Stores, Inc. v. Mantor, 335 F.3d 1101, 1106-07 (9th Cir.2003); A & M Produce Co. v. FMC Corp., 135 Cal.App.3d 473 , 186…

FILED

NOT FOR PUBLICATION DEC 17 2014

MOLLY C. DWYER, CLERK

UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

THOMAS ZABOROWSKI; VANESSA No. 13-15671

BALDINI; KIM DALE; NANCY

PADDOCK; MARIA HOWARD; TIM D.C. No. 3:12-cv-05109-SI PLATT, on behalf of themselves and all others similarly situated,

MEMORANDUM*

Plaintiffs - Appellees,

v.

MHN GOVERNMENT SERVICES, INC.;

MANAGED HEALTH NETWORK, INC.,

Defendants - Appellants.

Appeal from the United States District Court for the Northern District of California Susan Illston, Senior District Judge, Presiding

Argued and Submitted November 18, 2014 San Francisco, California

Before: GOULD and WATFORD, Circuit Judges, and MARTINEZ, District Judge.**

* This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3. ** The Honorable Ricardo S. Martinez, District Judge for the U.S. District Court for the Western District of Washington, sitting by designation. Page 2 of 6 MHN Government Services, Inc. (MHN) appeals from the district court’s

order denying its…